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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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FORM 8-K

 

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CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported)

January 26, 2006

 

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Consolidated Edison, Inc.

(Exact name of registrant as specified in its charter)

 

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New York		1-14514		13-3965100
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

4 Irving Place, New York, New York		10003
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code

(212) 460-4600

 

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Consolidated Edison Company of New York, Inc.

(Exact name of registrant as specified in its charter)

 

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New York		1-1217		13-5009340
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

4 Irving Place, New York, New York		10003
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code

(212) 460-4600

 

 

(Former name or former address, if changed since last report)

 

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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INFORMATION TO BE INCLUDED IN THE REPORT

 

ITEM 2.02 Results of Operations and Financial Condition

 

On January 26, 2006, Consolidated Edison, Inc. (Con Edison) issued a press release reporting, among other things, its results of operations for 2005. Con Edison’s condensed unaudited consolidated balance sheets at December 31, 2005 and 2004 and unaudited consolidated income statements for 2005 and 2004 were attached to the press release. The press release (including its attachments) is “furnished” as an exhibit to this report pursuant to Item 2.02 of Form 8-K.

 

ITEM 9.01 Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit 99    Press release, dated January 26, 2006, furnished pursuant to Item 2.02 of Form 8-K.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

Date: January 30, 2006

 

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Exhibit 99

 

CON EDISON REPORTS 2005 EARNINGS

 

Increases Dividend for 32^nd Consecutive Year

 

NEW YORK - Consolidated Edison, Inc. (Con Edison) [NYSE: ED] today reported 2005 earnings from continuing operations of $732 million or $3.00 a share, compared with $549 million or $2.33 a share in 2004. The 2004 results include the impact of non-cash after-tax charges totaling $80 million or $0.34 a share related to Con Edison of New York’s electric, gas and steam rate plans. Including losses from discontinued operations of Con Edison Communications, net income for common stock for 2005 was $719 million or $2.95 a share compared with $537 million or $2.28 a share in 2004.

 

For the fourth quarter of 2005, the company’s earnings from continuing operations were $146 million or $0.59 a share compared with $52 million or $0.22 a share for the fourth quarter of 2004. Results for the fourth quarter of 2004 include $65 million or $0.27 a share of the non-cash charges noted above. Net income for common stock, including discontinued operations was $138 million or $0.56 a share compared with $51 million or $0.21 a share in the 2004 period.

 

“Con Edison’s utility operations performed very well under extreme weather conditions in 2005,” said Kevin Burke, the company’s President and Chief Executive Officer. “The investments we have made in our infrastructure over the past few years enabled us to reliably meet the energy needs of our customers during the summer of 2005. These investments enable New York’s economy to continue to grow,” he said.

 

The company also declared a quarterly dividend of 57 ¹/2 cents a share on its common stock, payable March 15, 2006 to shareholders of record as of February 15, 2006, an annualized increase of 2 cents over the previous annual dividend of $2.28 a share. “Today’s increase in the dividend, the 32nd consecutive annual increase, reflects our confidence in the company’s future and is a tangible measure of our commitment to our shareholders,” said Robert N. Hoglund, Senior Vice President and Chief Financial Officer.

 

The company expects its earnings for 2006 to be in the range of $2.90 to $3.10 a share. The forecast reflects construction expenditures of $1.8 billion for the company’s regulated utilities, and common stock issuance of between $250 million and $450 million in addition to stock issuances under the company’s dividend reinvestment and employee stock plans.

 

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CON EDISON REPORTS 2005 EARNINGS		Page 2

 

The following table shows the major factors affecting Con Edison’s earnings per share from continuing operations for the year and fourth quarter of 2005 compared with the 2004 periods:

 

		Year 2005 vs. 2004				Quarter 2005 vs. 2004
Con Edison of New York:
Sales growth (estimated)		$	0.16			$	0.05
Impact of weather in 2005 versus 2004 (estimated)			0.17				0.05
Electric rate plan (estimated)			0.72				0.19
Gas rate plan (estimated)			0.13				—
Steam rate plan (estimated)			0.20				0.04
Increased pension and other postretirement benefit costs			(0.19	)			(0.05	)
Higher operations and maintenance expense			(0.26	)			(0.12	)
Higher depreciation and property tax			(0.37	)			(0.11	)
Allowance for funds used during construction			(0.11	)			(0.04	)
2004 non-cash rate plan charges			0.34				0.27
Other			(0.14	)			0.03
Total Con Edison of New York			0.65				0.31
Orange and Rockland Utilities			0.01				(0.01	)
Unregulated energy subsidiaries (including parent company)			0.01				0.07
Total earnings per share variation from continuing operations		$	0.67			$	0.37

 

The earnings per share variations shown above include the dilutive effect of a higher weighted average number of common shares outstanding in the three months and year ended December 31, 2005. The weighted average number of common shares were 245 million shares and 244 million shares for the three months and year ended December 31, 2005, compared with 242 million shares and 236 million shares in the 2004 periods, respectively. The dilutive effect on earnings per share from continuing operations for the three months and year ended December 31, 2005 is $0.01 and $0.10, respectively. These amounts per share do not reflect the offsetting benefits of avoided interest expense.

 

For Con Edison of New York, increased revenues provided by the electric rate plan that took effect in April 2005 and the gas and steam rate plans that took effect in October 2004 reflected higher expenses for pensions and other postretirement benefits, ongoing operations and maintenance, depreciation and property taxes, and the required return on capital invested in its energy infrastructure. Pension and other postretirement benefit costs increased due primarily to lower net pension credits from the amortization of previous years’ net investment results. Higher depreciation and property taxes reflect continuing infrastructure investment programs and the commercial start-up of the East River Repowering Project.

 

Under the electric rate plan, pension and other postretirement benefit costs and environmental remediation expenses in excess of the amounts reflected in rates were deferred as regulatory assets. Fifty percent ($47 million) of these regulatory assets were offset by estimated electric earnings in excess of the target (11.4% return on common equity) for the rate year ending March 31, 2006. At December 31, 2005, the company had accrued a $6 million reserve for the customers’ fifty percent share of the remaining above-target earnings.

 

 

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CON EDISON REPORTS 2005 EARNINGS		Page 3

 

The performance of the unregulated energy subsidiaries in the fourth quarter of 2005, compared with the 2004 period, reflects primarily decreases in forward prices of electricity that resulted in the reversal of previously recognized unrealized mark-to-market accounting losses.

 

Amounts of electricity, gas and steam delivered by Con Edison of New York in 2005, after adjusting for variations in weather and billing days in the period, increased 2.4 percent, 2.4 percent and 1.8 percent, respectively, as compared with the 2004 period.

 

Refer to the attachments to this press release for the condensed consolidated balance sheets at December 31, 2005 and 2004 and the consolidated income statements for 2005 and 2004. Additional information related to utility sales and revenues is available at www.conedison.com (select “Investor Information” and then select “Financial Reports”).

 

This press release contains forward-looking statements that reflect expectations and not facts. Actual results may differ materially from those expectations because of factors such as those identified in reports the company has filed with the Securities and Exchange Commission.

 

Consolidated Edison, Inc. is one of the nation’s largest investor-owned energy companies, with approximately $12 billion in annual revenues and $25 billion in assets. The company provides a wide range of energy-related products and services to its customers through the following subsidiaries: Consolidated Edison Company of New York, Inc., a regulated utility providing electric, gas, and steam service in New York City and Westchester County, New York; Orange and Rockland Utilities, Inc., a regulated utility serving customers in a 1,350 square mile area in southeastern New York state and adjacent sections of northern New Jersey and northeastern Pennsylvania; Con Edison Solutions, a retail energy supply and services company; Con Edison Energy, a wholesale energy supply company; Con Edison Development, a company that owns and operates generating plants and participates in other infrastructure projects; and Con Edison Communications, a telecommunications infrastructure company and service provider.

 

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Attachment A

 

CONSOLIDATED EDISON, INC.

CONSOLIDATED BALANCE SHEET (Condensed)

(UNAUDITED)

 

		December 31, 2005			December 31, 2004
		(Millions of Dollars)
ASSETS
PLANT, AT ORIGINAL COST
Utility plant - net		$	16,210		$	15,168
Non-utility plant - net			849			873
Non-utility property held for sale			52			47
NET PLANT			17,111			16,088
CURRENT ASSETS
Cash and temporary cash investments			81			26
Accounts receivable - customers, less allowance for uncollectible accounts			1,025			741
Other receivables, less allowance for uncollectible accounts			350			198
Inventories			425			325
Prepayments			434			93
Fair value of derivative assets			331			66
Current assets held for sale			8			5
Other current assets			278			277
TOTAL CURRENT ASSETS			2,932			1,731
INVESTMENTS			265			257
DEFERRED CHARGES, REGULATORY ASSETS AND NONCURRENT ASSETS
Goodwill			406			406
Intangible assets - net			90			100
Prepaid pension costs			1,474			1,442
Regulatory assets			2,247			2,258
Other deferred charges and noncurrent assets			324			278
TOTAL DEFERRED CHARGES, REGULATORY ASSETS AND NONCURRENT ASSETS			4,541			4,484
TOTAL ASSETS		$	24,849		$	22,560
CAPITALIZATION AND LIABILITIES
CAPITALIZATION
Common shareholders’ equity		$	7,310		$	7,054
Preferred stock of subsidiary			213			213
Long-term debt			7,398			6,561
TOTAL CAPITALIZATION			14,921			13,828
NONCURRENT LIABILITIES
Provision for injuries and damages			167			180
Pension and retiree benefits			223			207
Superfund and other environmental costs			238			198
Noncurrent liabilities held for sale			9			5
Other noncurrent liabilities including minority interest			225			134
TOTAL NONCURRENT LIABILITIES			862			724
CURRENT LIABILITIES
Long-term debt due within one year			22			469
Notes payable			755			156
Accounts payable			1,236			920
Customer deposits			229			232
Fair value of derivative liabilities			133			24
Deferred derivative gains			224			23
Current liabilities held for sale			12			11
Other current liabilities			622			410
TOTAL CURRENT LIABILITIES			3,233			2,245
DEFERRED CREDITS AND REGULATORY LIABILITIES
Deferred income taxes and investment tax credits			3,734			3,726
Regulatory liabilities and other deferred credits			2,099			2,037
TOTAL DEFERRED CREDITS AND REGULATORY LIABILITIES			5,833			5,763
TOTAL CAPITALIZATION AND LIABILITIES		$	24,849		$	22,560

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Attachment B

 

CONSOLIDATED EDISON, INC.

CONSOLIDATED INCOME STATEMENT

(UNAUDITED)

 

		For the Three Months Ended December 31,								For the Years Ended December 31,
		2005				2004				2005				2004
		(Millions of Dollars/Except Share Data)
OPERATING REVENUES
Electric		$	1,905			$	1,414			$	7,588			$	6,652
Gas			544				396				1,858				1,507
Steam			175				134				649				550
Non-utility			483				237				1,595				1,049
TOTAL OPERATING REVENUES			3,107				2,181				11,690				9,758
OPERATING EXPENSES
Purchased power			1,297				925				4,743				3,960
Fuel			263				130				816				597
Gas purchased for resale			368				209				1,155				852
Other operations and maintenance			446				374				1,685				1,495
Depreciation and amortization			149				139				584				551
Taxes, other than income taxes			311				265				1,185				1,080
Income taxes			42				(15	)			364				292
TOTAL OPERATING EXPENSES			2,876				2,027				10,532				8,827
OPERATING INCOME			231				154				1,158				931
OTHER INCOME (DEDUCTIONS)
Investment and other income			28				3				33				42
Allowance for equity funds used during construction			1				7				9				25
Preferred stock dividend requirements of subsidiary			(3	)			(3	)			(11	)			(11	)
Other deductions			(3	)			(4	)			(16	)			(14	)
Income taxes			13				7				23				20
TOTAL OTHER INCOME (DEDUCTIONS)			36				10				38				62
INTEREST EXPENSE
Interest on long-term debt			114				106				444				426
Other interest			8				11				27				36
Allowance for borrowed funds used during construction			(1	)			(5	)			(7	)			(18	)
NET INTEREST EXPENSE			121				112				464				444
INCOME FROM CONTINUING OPERATIONS			146				52				732				549
LOSS FROM DISCONTINUED OPERATIONS (NET OF INCOME TAXES OF $1, $1, $4, and $8)			(8	)			(1	)			(13	)			(12	)
NET INCOME		$	138			$	51			$	719			$	537
EARNINGS PER COMMON SHARE - BASIC
Continuing operations		$	0.59			$	0.22			$	3.00			$	2.33
Discontinued operations			(0.03	)			(0.01	)			(0.05	)			(0.05	)
Net income		$	0.56			$	0.21			$	2.95			$	2.28
EARNINGS PER COMMON SHARE - DILUTED
Continuing operations		$	0.59			$	0.22			$	2.99			$	2.32
Discontinued operations			(0.03	)			(0.01	)			(0.05	)			(0.05	)
Net income		$	0.56			$	0.21			$	2.94			$	2.27
AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC (IN MILLIONS)			245.0				242.2				243.9				235.8
AVERAGE NUMBER OF SHARES OUTSTANDING - DILUTED (IN MILLIONS)			245.9				242.9				244.7				236.4